Speaking at a forum at the University of Sydney last night, Mr Piccoli accused both the Prime Minister and the Opposition Leader of losing sight of the recommendations made by the review headed by David Gonski.

''The greatest problem here is overcoming the politics. I think everybody actually knows what the right thing to do is: to have needs-based funding,'' Mr Piccoli told an event chaired by the dean of education and social work, Professor Rob Tierney.

''Who can oppose that, unless you have some sort of overriding ideology and, unfortunately, overriding ideologies are overriding what is an eminently sensible and fair thing to do for all Australians. I think it's terrible.''

Earlier, Mr Piccoli told Parliament the state government had welcomed the review, which promised to deliver more funding to public schools in NSW.

''I certainly agree with the sentiment of the Gonski panel that most of the proposed funding increases should be directed to public schools because most disadvantaged students are concentrated in this sector,'' he said. ''According to the Gonski report, two-thirds of Australia's estimated 3.5 million students attend government schools and that is where the need is most intense.''

Last night Mr Piccoli said NSW had schools that ''probably don't fit the criteria of being schools from a first world country''.

He added that no one would be more thrilled than he if elite schools such as Kings and Riverview enrolled 50 per cent of their students from indigenous backgrounds or from low-income families from south-western Sydney. ''But they don't. Funding has got to go to students who need it most,'' he said.

The comments follow those of Mr Abbott, who earlier this week said there was ''no question'' the generosity of public school funding was an ''injustice'' compared with government funding for private schools. Ms Gillard had extolled the virtues of non-government schools and promised them all an increase in funding.

The opposition education spokesman, Christopher Pyne, later went into damage control in response to the furore his leader's comments caused. He issued a statement pledging ''across the board'' increases for schools, guaranteeing no school would be worse off.

Mr Piccoli said the vacuum left by the federal government's failure to commit to implementing the review was ''driving some of this sector versus sector debate''.

''This issue is too important to be used as a political football,'' he said. ''Any changes to school funding should not be used to pit public schools against private schools.

''Schools with higher needs should always receive additional funds regardless of their sector. Public schools and low fee non-government schools ought to be the beneficiaries of any decisions made based on the Gonski review.''

Mr Piccoli, who is the National Party MP for Murrumbidgee, said schools in the New England and north-west regions of NSW, typically had a higher proportion of disadvantaged students and ''would attract higher loadings under a Gonski scenario''.